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An employer's investigation and disciplinary process into an employee's alleged fraud did not breach her employment contract, nor its duty of care to her, a court has ruled in rejecting her psychological injury damages appeal.

The Victorian Supreme Court of Appeal accepted the employer didn't owe the employee a duty of care to provide her with a safe system of work when investigating her alleged misconduct.

The appeal bench acknowledged that while a case before the High Court is challenging this very issue, it wasn't satisfied, "as things presently stand", that it was necessary to depart from previous case law authority...